GBP/USD’s down trend resumed last week by breaking 1.1759 low. But it recovered after hitting 1.1716. Initial bias is neutral this week first. In case of another recovery, upside should be limited by 1.2002 support turned resistance to bring another fall. Break of 1.1716 will resume larger down trend to 1.1409 long term support. However, firm break of 1.2002 will dampen this bearish view and bring stronger rise back to 1.2292 resistance.
In the bigger picture, fall from 1.4248 (2018 high) could be a leg inside the pattern from 1.1409 (2020 low), or resuming the longer term down trend. Deeper decline is expected as long as 1.2292 resistance holds. Next target is 1.1409 low. However, firm break of 1.2292 will bring stronger rise back to 55 week EMA (now at 1.2859).
In the longer term picture, rebound from 1.1409 long term bottom should have completed at 1.4248 already, well ahead of 38.2% retracement of 2.1161 to 1.1409 at 1.5134. The development argues that price actions from 1.1409 was a corrective pattern only. That is, long term bearishness is retained for resuming the down trend from 2.1161 (2007 high) at a later stage.
